Pay-As-You-Save Financing Models

Although energy-efficiency investments are a cost effective means for decreasing energy consumption, enhancing home comfort and reducing utility bills, there still remains a variety of barriers for consumers interested in making energy-saving home upgrades.

The good news is innovative programs are being launched around North America and UK to help remove barriers like high upfront costs and access to financing so homeowners can leverage home retrofits to achieve monetary and energy savings. Known as ‘Pay As You Save’ (PAYS) financing models, the concept is based on spreading the cost of home upgrades over a substantial period of time where the energy savings from a home upgrade helps pay for the financial loan. The PAYS golden rule is the energy savings generated from home upgrades must achieve savings equal to or more than the cost of the repayment terms.

So, what does this mean for you? Well, the City of Vancouver has launched an exciting new initiative based on the PAYS model called: “Home Energy Loan Program”. Created through partnership with Vancity, Fortis BC, BC Hydro and Natural Resources Canada, loans ranging from $4,000 to $16,000 are available to homeowners looking to make energy-efficient home improvements like insulation, high-efficiency furnaces and heat pumps.

Established as a twelve-month pilot for 500 homes in Vancouver, the Home Energy Loan Program is a significant step and introduction of PAYS in British Columbia. If you’re interested, stay tuned for future articles on PAYS models like On Bill Financing and Property Assessed Clean Energy.